ii) The use of billeted uppers and/or lower receivers are not permitted.

What does this mean?

No billet uppers or lowers are legal for service rifle competition.

Dosen't seem to make a lot of sense to me.  

Forged only?  With some makers it's hard to tell forged vs billet.

No its not...

Is this because of the old forged vs billet not being as strong argument?

It is not as-issued.

The reason is simple.  They are supposed to closely mimic ordinary service rifles.   Over time more enhancements and modifications have been allowed.  In the context of how loose the current rules are for something to qualify as a "service rifle" for the purposes of CMP competition, it makes less sense to not allow billet receivers than in the past.

A billet receiver may have different dimensions and weight than a standard GI type forged version.  While it doesn't usually matter much, it could change the feel of the rifle and reliability; perhaps an advantage for some.  Such advantages are intended to be limited for CMP competitions.  Yes, it may not make a lot of sense if you look at what things are allowed now.  Rules are rules and if you want something tricked out you can always shoot NRA matches instead.

Utimately, CMP rifles are supposed to be more military than sporting or target.

Here is b) complete;

b) Action. Must be designed or modified so that only semi-automatic fire is
possible. The gas operating system must be fully operable and adhere to
the original M16 rifle design (i. e. Stoner design, gas impingement system)
or have a piston-operated gas system. Adjustable gas blocks are not
permitted. A gas block without a front sight is permitted. Left-handed
receivers that reverse the operational design features of M16/AR-type
rifles and with the ejection port opening upwards are permitted. An
extended bolt release is permitted on both right and left-handed receivers,
provided there are no permanent alterations to upper or lower receivers.
i) Relieved (Milled/Cut) lowers are allowed, but the use of an extended
bolt release that requires a relief in the receiver is not permitted.
Extended bolt releases must be attached on the original manufactured
side of the lower receiver.
ii) The use of billeted uppers and/or lower receivers are not permitted.
iii) Ambidextrous safeties are permitted. Ambidextrous magazine releases
and ambidextrous charging handles are not permitted.

More than a couple items permitted are "not as issued. "

OK...  You tell us....

Just signed up/registered over at the CMP Forums.  As soon as I'm "activated"  I'll post the question over there and report back.

Their game their rules. Does not matter what  you think, agree with, or want, those are the rules. Don’t try to logic your way or reason your way into something that’s not there. They say it’s legal or not and that’s that. They are more generous now than in the past. Get a standard lower and upper and go shoot, or sit around and complain. They don’t care either way. So build it by their standard or don’t. It’s really that easy. It’s called Service Rifle, but it has nothing to do with as issued except in mild appearance now. It’s not exactly a military sport, although they do compete in it heavily, and they also have their own programs. To think the CMP has anything to do with what the military issues or uses is laughable at best. It’s just a sport, just a game, that happens to have a history with the military. It’s just traditions now.
I’ve been shooting the game since 2009, shot for the All Guard, distinguished, high master, all that. With an A2. Now I shoot the same damn rifle, except as an A4 with a Nightforce 4.5x competition model in a Geissele mount. Same fixed stock, same everything.  Not hard to build a legal rifle. You do not need anything special. Couple years ago when the rules became a little less restrictive and added optics as legal, suddenly people started “needing” everything there was, and the gamers started gaming. No need for it. It’s just too easy to stay within the rules and have a great rifle that will take you to any finish you can muster, as it’s your abilities that matter.

Not complaining.  Just curious.  I've been shooting the Nationals at Camp Perry since the late 90s..  I have a few National Match rifles from Garands and M1As to ARs.  Just notice this in the rules and was curious.  That's all.

Two of my rifles are DCM Garands purchased for $160.00.  

Around 2016 is when the rules changed, and they said “derived from m16 design “ that led to the madness. Now they have seriously changed and updated the, 15-20 times, having to be specific about some parts people were using and claiming derived from as a reason. Back in the day as you know, the attitude towards Sr rice rifles rules were if it isn’t in the rules, you can’t use it. Which is 180 from damn near anything else out there as far as rule interpretation. Think of 3 gun etc. it doesn’t say I can’t so I can is the usual. That somehow got transferred into the service rifle culture and has created a lot of problems for cmp, and competitors, match directors, new guys and old guys. Ironically in their games match rules they do a much better job of laying it out. And go as far as to actually say if it’s not in here it’s not within the spirit of the rules. The Games events also split up modern military this year, and it appears that’s the primary focus of the cmp lately. Meanwhile NRA took out derived from in their rules, and went back to the external appearance except for the following modifications. The NRA rules make more sense than the CMP rules do... Crazy times.

Ya I'm getting back into it after about a ten year hiatus. Was surprised/disappointed most with allowing scopes up 4.5 power.  I'm still using irons on my AR15 in stock A2 configuration.  I'm about the only one on the line.  I have an AR10 flat top with an ACOG on it that I see fits.  (4.1.6)  I might try that just for grins.

CMP RULE BOOK

NRA RULE BOOK

Upper receivers must look identical to GI issue, flat top or the standard carry handle doesn't matter. No custom side charging, heavyweight, enlarged ejection ports etc.

AR10 barrel must be exactly 20" long.